The World Bank Is a Big Fan of China’s Low-Cost, High-Speed Trains

Passengers board a train at a newly-built railway station in Shijiazhuang, capital of north China’s Hebei Province, on June 29, 2014.

Zuma Press

At every overseas whistle stop these days, China’s leaders peddle their nation’s high-speed rail construction as a route to modernization. Now, the country’s train salesmen can claim a big endorsement from a trio of World Bank experts who laud its discount construction costs.

At more than 10,000 kilometers (6,200 miles) of track by the end of last year, the report says China’s system “far exceeds” the high-speed rail capacity of any nation, with another 12,000 kilometers under construction. Flush with words like “remarkable” and “world class,” the report says China’s system operates at high volumes while maintaining good reliability and comfort for passengers.

Topping it off is the price tag: “This has been accomplished at a cost which is at most two-thirds of that in the rest of the world,” says the report.

World Bank senior transportation specialist Gerald Ollivier and two bank consultants who authored the report estimated infrastructure unit costs for China’s fastest trains at around $17 million to $21 million per kilometer, compared with $25 million to $39 million per kilometer in Europe. Construction costs for a high-speed line planned in California, it said, may be as high as $52 million per kilometer.

The term “high-speed rail” typically refers to trains built to run at speeds exceeding 250 kilometers per hour (155 miles per hour), though some of China’s are designed to reach 350 kilometer per hour.

In addition to lower labor, land and resettlement costs, the report says China has benefited from high production volume over the past seven or so years. Such volume, it says, “energized the construction and equipment supply community to build capacity rapidly and adopt innovative techniques.”

The railway represents China’s ambition to export high technology, and the nation’s political leaders invariably use meetings with foreign dignitaries as sales calls to encourage global acceptance of Chinese-built infrastructure, describing the discount choice as the right choice.

During a recent trip to London, Premier Li Keqiang highlighted China’s desire to sell trains in the United Kingdom. In March when meeting with an Indian official, the premier used an argument Silicon Valley entrepreneurs tend to use when visiting China: the win-win possibilities that might come from combining China’s technological and cost advantages in high-speed rail with the sub-continent’s big population.

The World Bank eight-page report doesn’t delve into some of the system’s failings, sticking instead to construction cost estimates.

Lead author Mr. Ollivier said by email that he was traveling and unavailable for immediate comment; a bank spokeswoman declined to comment on the report.

The report’s most negative reference is this sentence: “[China’s trains] have carried a large volume of passengers safely, except for one major accident in 2011 that caused about 40 fatalities, attributed to inadequate testing of a new design of signaling equipment, which lacked proper fail-safe features.”

The “major accident” involved a high-speed locomotive that had rammed into the back of another train near downtown Wenzhou, an accident that prompted a national round of soul-searching about the need for speed in China’s infrastructure development, briefly stopping the railway expansion program in its tracks and raising questions around the world about the quality and non-financial costs of China’s whiz-bang infrastructure construction.

The World Bank report provides no insight into a major cost of China’s railway construction: corruption. For instance, it doesn’t mention the downfall of the high-speed railway system’s original champion, former Railway Minister Liu Zhijun, whose alleged financial shenanigans eventually led to a death sentence.